In today’s booming economy, it may seem strange to think about what to do about advertising during and just after a recession. However, by keeping these things in mind now, you’ll be prepared for success when the next economic downturn comes. It turns out that maintaining and even improving profits during a recession year often isn’t as hard as it may seem.

Lessons From the Last Recession

One of the most common reactions to a recession – and one of the biggest mistakes – is to cut advertising. This is actually when you should stand firm in your commitment to advertising your business. It works on much the same principle as Warren Buffett’s investing advice: “Be fearful when others are greedy, and greedy when others are fearful.”

In advertising, being “greedy” when others are fearful means to keep advertising when your competition is cutting back. Doing so provides more benefits than keeping your business in people’s minds. Since your competition will be advertising less, your ads will stand out far more than they usually do. This will allow your message to get noticed by more people than ever, thereby pulling in customers that ordinarily would ignore your ads. Because of this, advertising during a recession provides far more power than it does at other times. The effect continues long after the recession year, with big results being derived as long as two years or more after the economy recovers.

A Look at Different Strategies

A study published by Buchen Advertising, Inc. compared the sales indices between companies that either cut back advertising during a recession, cut it during the first post-recession year, or did not cut it at all. The results were striking. Those who did not advertise during a recession suffered a dip in sales during the down year and then recovered only slowly the year after. The year after that, they saw an increase in sales, but not as big of one as it could have been.

Companies that advertised during the first recession year, but cut their ads in the second, had flat sales during the downturn and the year after, but only a slight increase the year after that.

Businesses that kept advertising through the recession and continued their ads the year after, saw superior results to those using the other two strategies. During the recession year itself, they had far more sales than the other companies. The year after, their sales were already starting to soar. One more year after that, they had left their competitors far behind. They had a sales index of almost 160, compared to about 118 for the recession-year cutters and just 115 for the second-year cutters.

Advertise, Advertise, Advertise!

As this shows, the best course of action during an economic downturn is to keep your advertising budget at full strength. Not only will this help to keep the sales coming in during the recession but will contribute to soaring sales as the economy recovers. Your fearful competition will be left in the dust thanks to their lack of marketing efforts during the critical times.

Of course, it’s always important to place your advertising where your target audience will see it. If your company needs to reach an upscale audience, we suggest placing ads in performing arts program books and performing arts digital signage. In a recession, this is an especially cost-effective way to advertise. People only go to see performing arts shows if they still have discretionary income, so these patrons will be ready and able to buy your products or services. When the economy is good, the pool of potential customers is even bigger, so you will gain a great ROI.

To learn more, just give us a call. Onstage is always ready to help you get the most for your advertising dollar. Good selling!

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